December 2009

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A Year End Fund Raising Task:
Assess Your Organization’s Funding Profile

by Cynthia M. Adams
GrantStation.com, Inc.

Given today’s economy, every organization needs to concentrate their efforts on diversifying their income. Don’t make the mistake of being timid about planning fundraising activities for 2010.

The first place to look when charging forward with your funding plan is to build on existing and successful income streams. If you have a strong membership program, then you’ll want to consider taking the next steps to recruit more members, and to upgrade existing members to major donors. If you have a substantial revenue stream from product sales (such as ticket income for your summer Shakespeare in the Park productions, or the spring plant sale you have each year) then consider ways to generate even more income from these already successful earned income streams.

Regardless of the type of fundraising, if it is currently successful you want to plan on how you can build on that success.

Your next step is to consider new avenues of funding. To help you do this, I have provided a sample pie chart (see below) that you can refer to as you seek new funding sources, and new types of funding.

The following fund raising rules of thumb (please note these are my own “rules” that I’ve established after 35 years of fundraising) have been used to develop this sample chart:

• Private grant awards usually apply to general operating or special projects and should make up about 5% to 10% of an organization’s annual budget.
• Between 10% and 15% of an organization’s annual income should be generated via special event(s).
• Earned income should make up at least 10% to 15% of an organizations annual income. The more earned income the organization can generate the better.
• No single source of funding, with the exception of government grants and earned income should exceed 25% of an organization’s annual income.
• Organizations that are more than 10 years old should be running a capital or endowment campaign once every five years.
• Organizations that are 15 years old or older should receive 6% to 8% of their annual income from the interest income generated via their endowment/planned gifts.

There are no rules that apply to every nonprofit organization. You should ask your Fund Raising Committee (or your board of directors) to help develop a set of rules, such as these, that you can apply to your organization. Each organization will have a different profile. But do remember to push yourselves so that you are always attempting to diversify.

The following pie chart is a sample of a healthy income profile for a nonprofit organization:

You can see that this organization has numerous revenue streams which equate to a financially healthy, sustainable organization. That’s exactly what you want your organization to look like.

Assessing Your Organization
What does the income for your organization look like? Is it a healthy mix, or do you need to focus on diversification? Take a few minutes and create your own profile.

A simple way to prepare your own organizational profile is to take your operating budget, and look at all of the income streams. Add this list to an Excel spreadsheet, along with the amount of income that is generated from each revenue stream. Use the charts and graphs function of Excel to help you create a pie chart to visually demonstrate your existing situation.

You can use the profile you create, along with the rules developed by your Fundraising Committee, to help your board understand the need to diversify your funding sources, and which areas of fundraising you want to focus on throughout 2010.

Now is a good time to plan for the 2010 calendar year. If you’re interested in incorporating a grants calendar in your 2010 plan, you may want to visit the Tracks to Success article on the home page of GrantStation (Building a Grants Calendar for 2010) which will run through January 2010.

Sustainable Pathways training is a great way to complete your 2010 funding plan -- register now, or sponsor a workshop in your own community!